The nonprofit organization NeighborWorks America recently released a study examining the relationship between young people and homebuying. The study overwhelmingly found that survey respondents were misinformed about homeownership in ways that was preventing them from participating in the market and that this was having an impact on the housing market on the whole. Learn more in today’s blog, below.
Misinformation has an impact on the housing market, study shows.
Recent Study Shows That Homebuying Misinformation is Slowing Housing Market
Prospective home buyers aren’t aware of available assistance
One of the most surprising aspects of the study was that about 40% of respondents did not know that they may qualify for homebuying incentive. Many consumers believe that they do not have enough saved for a downpayment or that due to issues such as a low credit score, they can’t qualify for a mortage (neither of which are necessarily true).This lack of education is keeping many otherwise eligible homeowners from taking the plunge.
Consumers greatly overestimate repair costs
Another source of misinformation that is impacting the housing market is the estimated cost of home repairs. Those surveyed generally overestimated the yearly home maintenance costs of a home by 3 times what it would really cost. Most homeowners spend an average of $2-5000 on yearly home maintenance, while survey respondents assumed the number would be nearer to $15,000. This could be preventing many young homeowners from purchasing because they assume they will not be able to keep up with ongoing maintenance costs.
Key takeaway: consumers need to be made aware of available resources
While there is a plethora of information available about homebuying incentives and assistance, many prospective homeowners (particularly of a younger generation) simply aren’t aware that this information is out there. The report stressed how important it is that potential buyers become connected with housing counseling and other forms of home buying education in order to create a more realistic view of the costs and challenges associated with homeownership. Tapping into this younger generation could go a long way in creating a more robust housing market.
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Tags: housing market